Archive: 2011

1
PBS President Discusses Future of Public Media on Broadband US TV
2
Mobile Telecommunications Market Nearly 2% of World’s GDP
3
Court Upholds FCC Media Ownership Rules But Remands Newspaper-Broadcast Cross-Ownership Rule
4
Net Neutrality Rules Under OMB Review
5
Net Neutrality Transparency Guidance Issued by FCC
6
FTC Launches Antitrust Investigation Against Google
7
Supreme Court Strikes Down California Law Prohibiting the Sale of Violent Video Games to Minors
8
Live Webcast Examines Controversial Pole Attachment Rules and Right-of-Way Access [UPDATED 6/21/11]
9
FCC Working Group Releases Future of Media Report
10
FCC Proposes to Extend Outage Reporting Rules to Internet-based Services [Updated: 6/9/11]

PBS President Discusses Future of Public Media on Broadband US TV

Last week Paula Kerger, President and CEO of the Public Broadcasting Service, discussed the future of public broadcasting and PBS in the current, fractured, media environment where broadcast spectrum reallocation is under serious consideration. Ms. Kerger appeared on a Broadband US TV webcast live from the floor of FOSE, the government information technology conference and expo in Washington, D.C.  Kerger, who was interviewed by Broadband US TV co-hosts Marty Stern of K&L Gates and Jim Baller of the Baller Herbst Law Group, discussed the importance of widespread and affordable broadband access as well as the significance of over-the-air broadcasting for, according to Kerger, the 45 million Americans who continue to rely on broadcast reception to receive local TV stations.

Touching upon the current funding crunch faced by many public media sources following the recent economic downturn (Kerger said that about 15% of PBS funding comes from the Federal government), the conversation moved the contentious issue of spectrum reallocation. Ms. Kerger noted PBS member stations’ early use of spectrum for multicasting as well as public safety and indicated that her organization would continue to watch the Congressional spectrum debate closely. When asked to discuss the future of public broadcasting over the next decade, Ms. Kerger emphasized the increased use of multiple platforms by viewers to access PBS programming, in particular mobile applications, and the need for public media to adapt to new technologies and opportunities. 

The full interview may be seen here (Registration required).

Mobile Telecommunications Market Nearly 2% of World’s GDP

Representing the growing prevalence and indispensability of mobile telecommunications worldwide, a recent study estimates that the mobile industry comprises almost 2% of global gross domestic product. The report, released by technology consulting group Chetan Sharma, found that mobile telecommunications currently accounts for nearly $1.3 trillion in global revenue as subscriptions rise exponentially in the U.S. and international markets. Research indicates that an explosion in data usage through smartphones and other next-generation mobile devices represents a key driver of the mobile industry, bringing in approximately $67 billion in the U.S. and $300 billion worldwide. The U.S. wireless data market grew 26% and per-month data usage more than doubled from 2009 to 2010. The gains for the mobile industry follow a critical turning point late last year, as smartphones outsold personal computers for the first time in history and data devices such as e-readers and tablets saw a jump in sales. 

Global data usage growth has already led some telecommunications providers to rein in or terminate their previously unlimited data plans as worldwide demand continues to climb unabated. Cisco Systems estimated that 48 million people in the world have mobile phones while lacking electricity at home. The same report concluded that over 7.1 billion mobile-connected devices will be in use by 2015, nearly one mobile device for every person on the planet. As a result, the mobile industry will likely soon account for an even larger slice of the global GDP pie.

Court Upholds FCC Media Ownership Rules But Remands Newspaper-Broadcast Cross-Ownership Rule

In a mixed decision for the FCC, the Third Circuit remanded part of the Commission’s 2008 order relaxing the newspaper-broadcast cross-ownership rule while upholding the order’s decision to maintain existing TV duopoly, radio ownership, and TV-radio cross-ownership rules. The remanded rule would have permitted newspaper-broadcast cross-ownership in the top 20 markets and in smaller markets under certain conditions.

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Net Neutrality Rules Under OMB Review

After a lengthy administrative delay, the FCC finally kicked off the Office of Management and Budget Review of the information collection requirements in its 2010 Open Internet Order. Today’s Federal Register published companion notices seeking comment to OMB on the network practice disclosures and complaint procedure paperwork required under the Commission’s proposed net neutrality rules. Comments to OMB on both of these notices are due by August 8, 2011.

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Net Neutrality Transparency Guidance Issued by FCC

In a preview of the disclosure obligations required by the FCC’s controversial net neutrality rules, the Commission recently issued advisory guidance to broadband service providers for meeting the transparency requirements of the 2010 Open Internet Order. The guidelines present a number of options by which broadband providers will disclose information regarding their network management practices, performance standards, and commercial terms to potential customers. The advisory guidance comes in response to requests from the broadband industry and Internet watchdog groups calling for flexible reporting requirements and regulatory clarity in advance of any enforcement of the transparency rules. Significantly, the advisory was issued by the Commission’s Enforcement Bureau and Office of General Counsel, reinforcing the potential for compliance exposure and that implementation issues will potentially be addressed in enforcement and complaint proceedings. The advisory guidance focused on five key areas:

      1.         Point-of-Sale Disclosures

The FCC clarified that the transparency rules do not require the distribution of information in hard copy or extensive training of employees regarding disclosure procedures. Broadband providers can normally meet their disclosure requirement by directing prospective customers to a web address at which the required disclosures are clearly posted and updated. In the case of “brick-and-mortar” retail outlets, broadband providers relying on the web for their point-of sale disclosure will need to make available equipment “such as a computer, tablet, or smartphone, through which customers can access the disclosures.”

      2.         Service Description

The Open Internet Order established an FCC broadband performance measurement project to assess network metrics such as connection speeds which broadband providers will need to disclose. The service description requirements vary depending on whether the provider offers fixed or mobile broadband. For fixed broadband, any provider which participates in the Commission’s performance measurement project can present the project’s results to customers to satisfy their disclosure requirement. Fixed broadband providers opting not to participate in the project may provide actual performance data based on internal testing, consumer speed reports, or reliable third-party sources.  

For mobile broadband, the FCC recognized the increased difficulties with obtaining accurate performance measurements. The guidance states that mobile providers “that have access to reliable information” may disclose the results of internal or third-party testing of mean upload and download speeds as well as mean roundtrip latency. The FCC will permit smaller mobile providers lacking advanced testing resources to provide a “typical speed range” experienced by most customers for each service tier offered along with a statement that the submitted data represents the provider’s best estimate of its service performance.

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FTC Launches Antitrust Investigation Against Google

By Ryan Demotte

Last week Google acknowledged in an SEC filing that the Federal Trade Commission has launched a formal antitrust inquiry into the company’s search and advertising business practices, issuing a subpoena and notice of a civil investigative demand to the company. According to news reports, FTC lawyers have been informally gathering information for several months concerning the way Google orders search results and advertising. By taking this step, the FTC can compel Google to turn over a wide range of internal information concerning its business. Rivals argue that Google engages in anticompetitive conduct by using its dominance in the search market to favor its own services and reduce web traffic to competing services. Google already faces a similar investigation by European regulators.

In a response posted on its official blog, Google provided a preview of what may be its core defense to any antitrust allegations – that competition in the search engine market is “only one click away,” and that users are free to use any of a variety of alternatives to Google. 

Using Google is a choice – and there are lots of other choices available to you for getting information: other general-interest search engines, specialized search engines, direct navigation to websites, mobile applications, social networks, and more.   

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Supreme Court Strikes Down California Law Prohibiting the Sale of Violent Video Games to Minors

The Supreme Court today concluded that video games qualify for the same First Amendment protections afforded to books, plays, and films. The Court’s 7-2 opinion in Brown v. Entertainment Merchants Assoc. upheld the 9th Circuit decision overturning a California statute which applied to video games containing the “killing, maiming, dismembering, or sexually assaulting an image of a human being” and punished violators with fines up to $1,000. 

Although this decision is the first time the Supreme Court addressed whether video games deserve the protection of the First Amendment, it concerns a 2005 state law that is already somewhat dated due to its focus on retail sales of disc-based games. Much of the recent growth in video game industry has shifted to games that operate online or over mobile wireless networks where access restrictions based on age or parental consent are more difficult to enforce.

Writing for the majority, Justice Scalia determined that the California law failed both prongs of the applicable “strict scrutiny” standard of review: 1) California did not demonstrate a compelling governmental interest in limiting minors’ access to violent games and 2) the state did not choose narrowly tailored means to implement the ban. On the first element, Justice Scalia found the purported connection between video games and increased violence in children unpersuasive, writing “[a]ny demonstrated effects are both small and indistinguishable from effects produced by other media. Since California has declined to restrict those other media, e.g., Saturday morning cartoons, its video-game regulation is wildly under-inclusive, raising serious doubts about whether the State is pursuing the interest it invokes or is instead disfavoring a particular speaker or viewpoint.” On the second element, the opinion noted that the video game industry already offers a voluntary rating system which can guide concerned parents. The Court distinguished its findings from the facts of Ginsberg v. New York, which involved the sale of “obscene” content to children, by remarking that the violence contained in the video games fell outside the Court’s traditional definition of obscenity.

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Live Webcast Examines Controversial Pole Attachment Rules and Right-of-Way Access [UPDATED 6/21/11]

Last week’s “Poles and Holes” webcast, carried live on Broadband US TV, sparked a lively debate among panelists representing the telecom sector on the one hand, and utility and local governmental interests on the other. The program featured FCC Wireline Competition Bureau Chief Sharon Gillett who talked with co-hosts Marty Stern of K&L Gates and Jim Baller of The Baller Herbst Law Group about the scope and application of the FCC’s new pole attachment rules, including the rules’ controversial new telecom rate formula and the first-time requirement that incumbent telephone companies get the benefit of regulated pole attachment rates.

The panel discussion highlighted the strong disagreement between telecom industry interests and utilities over the Commission’s new telecom rate formula, new deadlines on completing attachments, and whether revised rules were needed at all. On rights-of-way access and facilities siting matters involving local governments, there was also significant disagreement over the extent to which particular local governments have been a hindrance to deployment. One industry panelist suggested, particularly as to wireless deployments, that “it’s a real fight” in too many cases. Joanne Hovis, President-elect of NATOA, bristled at that notion, stressing the interest of governments in working cooperatively and collaboratively with providers to facilitate broadband deployment, and argued that the industry is trying to “short-circuit localism” and asking the FCC for relief. Hovis, instead, offered that industry should “come to us and we will work with you. If you have a problem with one of our members, we will work with them as well.”

The webcast may be viewed here (registration required).

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FCC Working Group Releases Future of Media Report

The FCC Working Group on the Information Needs of Communities delivered a comprehensive report yesterday addressing recent fundamental changes in the media landscape. The “Information Needs of Communities” report, produced by a group of journalists, scholars, media entrepreneurs, and government officials, reached a number of conclusions indicating that while technological advancements have improved public access to information, major deficiencies exist in contemporary news coverage. Specifically, the report found:

  • An explosion in Internet-based reporting on “hyperlocal” news directed by citizen journalists. The report expects further public reliance on Internet news sources as these non-traditional outlets proliferate. The Working Group pushed for rapid universal broadband deployment to expand access to these new media sources in rural and underserved communities. 
  • A marked decline in “local accountability reporting” from tradition news organizations. The Working Group noted that the recent increase in media outlets failed to result in more stories focused on community issues. The report warns that the dearth of local overage will result in less government accountability, greater corruption, wasted taxpayer dollars, and other community detriments. As a result, the study recommends policymakers craft incentives for media organizations to establish a “state-based C-SPAN” system and allocate more of the federal government’s $1 billion advertising budget for local media outlets.
  • Enhanced collaboration between commercial and non-profit media organizations, with synergies growing across media sectors. The report discovered increased diversification in non-profit media offerings, which the Working Group suggested should be supported through favorable tax reforms.
  • The FCC should take action to put media disclosure information online for easier public access. The Working Group advocated streamlining programming disclosures and eliminating burdensome disclosure rules. The report also advised the agency to take steps to discourage “pay-for-play” arrangements where TV stations allow advertisers to influence content. The report calls for the online disclosure of these arrangements.
  • The media industry would benefit from the repeal of the Fairness Doctrine and the termination of the FCC’s localism proceeding. The report also suggested the FCC re-assess the efficacy of the current satellite TV set-aside for educational programming.

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FCC Proposes to Extend Outage Reporting Rules to Internet-based Services [Updated: 6/9/11]

Update [6/9/11]:  The FCC’s Notice of Proposed Rulemaking extending outage reporting requirements to interconnected VoIP and broadband-based services was published in today’s Federal Register.  Comments are due by AUGUST 8, 2011 and reply comments are due by OCTOBER 7, 2011.  As we previously noted, the proposed rules raise a number of the same jurisdictional issues as the FCC’s net neutrality order and other Commission initiatives extending various regulatory requirements to IP-based services, and will likely be hotly contested. 

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The FCC believes Internet-related outages are a growing problem for which providers lack sufficient accountability and consumers lack appropriate notice. To address these issues, yesterday the FCC adopted a Notice of Proposed Rulemaking which would require interconnected VoIP, broadband Internet, and broadband backbone providers to report service outages lasting longer than 30 minutes. The proposal would impose reporting obligations similar to those currently borne by wireline and wireless carriers, cable operators, and certain satellite providers, and represents the latest example of FCC efforts to layer traditional carrier regulations on VoIP and broadband providers. The Commissioners voted 4-0 in favor of the proposed rules (Commissioner Meredith Baker recused herself following her announced upcoming departure from the FCC to join NBC/Universal). Citing the recent natural disasters affecting Japan and the Midwest and Southern states of the United States, Chairman Julius Genachowski stated the reporting obligations would provide the FCC with the data necessary to rapidly respond to emergency situations.

Leading Internet service and VoIP providers immediately criticized the proposed new rules, arguing that regulations designed for traditional circuit switched phone service are ill-suited for Internet-based technologies. By contrast, public service commissions of states like California and New York hailed the proposal as an effective means of improving local emergency communications.

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